Steep fall in investments

The first quarter of 2016 saw a drastic contraction of investments, at a rate of 9.6%, against the same quarter of the previous year, the highest negative growth since 2009. Looking at the structure of the fall, on the other hand, the picture is not entirely negative.

Beside plummeting public investments (by 61%), business investments also fell by nearly 5%, which is certainly bad news. But much of this fall was due to industries, like transport, or water supply and sewerage, pervaded by the „quasi-fiscal” sector – state-controlled enterprises. These industries took a huge hit – just as the public sector proper – from the near-absence of inflowing EU funds that kept investment high in the previous years. As for the private enterprise segment, investments still fell in manufacturing, but a couple of other industries posted some investment growth: construction, wholesale and retail trade, tourist accommodation and catering, communication. Real estate activities, another important economic branch, stagnated, but they are likely to grow in the second half of the year, due to a rebound in housing construction. As for manufacturing itself, the ongoing decline was largely driven by the automotive sector, the production of machinery and the chemical industry, more than half of the manufactring subsections recorded an investment growth.

If manufacturing investments begin growing during the coming quarters, private sector investments may grow in 2016. But even so, this year will see a palpable decrease in overall investments, due to the fall in the public and the quasi-fiscal sectors.